Gaming Strategy
Featured Stories
Legal News Financial News Casino Opening and Remodeling News Gaming Industry Executives Author Home Author Archives Search Articles Subscribe
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Recent Articles
Best of Howard Stutz
Howard Stutz

Gambling beyond Nevada: With breaks, Sands will build

31 March 2008

LAS VEGAS, Nevada -- Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson said his company stands ready to take its Cotai Strip model of destination resort development into other emerging Asian gaming markets.

One caveat: Adelson wants the jurisdictions to cough up lucrative tax breaks, infrastructure construction and other concessions before the gaming company will spend $15 billion to $20 billion to replicate what it is building in Macau.

In a luncheon address Wednesday at the JPMorgan Chase & Co. investment conference that was held at the Las Vegas Sands-owned Venetian, Adelson said his company has conducted economic impact studies on emerging markets in Asia that are considering legalizing casinos.

The billionaire casino developer, now the world's 12th richest person according to Forbes magazine, told the audience if a jurisdiction wants just a casino, Las Vegas Sands would spend "a couple hundred million to build a big box."

He said the company was willing to spend billions on an integrated resort, which would include a casino, hotel rooms, retail areas, convention space, restaurants and other amenities, similar to the company's planned $4 billion Marina Bay Sands in Singapore.

A string of integrated resorts, however, such as Macau's Cotai Strip, will cost extra. Las Vegas Sands is spending $12 billion on the Cotai Strip to build 14 casinos with 20,000 hotel rooms, 3 million square feet of retail, 3 million square feet of convention space and dozens of restaurants.

Adelson, 74, told the audience an Asian destination wanting its own Cotai Strip should be willing to waive gaming taxes and other fees, build roads and other services, and offer Las Vegas Sands additional benefits.

"We would make the largest investment in that country's history, which would bring in 8 (million) to 10 million incremental new tourists annually. That might be more than that country's population," Adelson said. "We'll also create a couple of hundred thousand new jobs. That's a very attractive proposition for any politician."

Adelson said Las Vegas Sands has conducted economic impact studies on potential Asian gaming markets showing how an integrated resort could help that country's tourism and consumer spending. He is traveling to several Asian destinations next week, but didn't say where.

"With 20,000 hotel rooms, we would create 130,000 jobs at the low end and up to 180,000 jobs at the high end," Adelson said. "We would move a country's GDP (gross domestic product) needle by at least 2.7 percent. Instead of us going in and kissing anyone's ring, they should look at the benefits we would offer."

Adelson's proposal intrigued both gaming analysts and rival casino operators.

Macquarie Capital gaming analyst Joel Simkins said a "desperate, Third World economy" might be willing to take Adelson up on the offer.

"Our view is that many Asian markets are underpenetrated, but there really isn't nothing on the front burner," Simkins said. "We've been hearing about Japan for what, 10 years? There has been discussion about South Korea and increased chatter coming from Vietnam, but these things have a long gestation period."

Deutsche Bank gaming analyst Bill Lerner said companies like Las Vegas Sands have demonstrated a willingness to invest in foreign markets that has resulted in job growth and increased tourism.

"I think the history affords them the right to start demanding concessions in order to mitigate their risks," Lerner said. "These companies have a track record of success."

Wynn Resorts Ltd. Chairman Steve Wynn, who is expanding Wynn Macau and controls a 52-acre site on the Cotai Strip, said Las Vegas Sands' success is worth noting.

"Obviously, Sheldon has something in mind, and I would need to have some more information," said Wynn, who is often at odds with Adelson. "He has done a fabulous thing, and I admire him. We'll see where he's going with this."

MGM Mirage Senior Vice President Alan Feldman, when asked about Adelson's proposal, said the jurisdictions that accept Las Vegas Sands' terms "might not be places where people would want to do business. But who wouldn't want a jurisdiction to forgo gaming taxes?"

Asian countries exploring large-scale gaming opportunities include Japan, Korea, Taiwan, Thailand and Vietnam.

Las Vegas Sands shares fell $3.22, or 4.08 percent, Thursday to close at $76.12 on the New York Stock Exchange.